When a business factors its accounts receivables, the businessno longer has to deal with the collection of the receivables from the customersreceives cash, less an applicable fee, after the factor collects from the customersuses the receivables as security for a loanreceives the total amount of the receivables from the factor

Solution:- Factoring is a concept in which the business sells its debtors to a third party, known as…

Answered: When a business factors its accounts…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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When a large account receivable balance is due from one client it is logical to use the direct write-off method to adjust the bad debt expense and accounts receivable balance. Under different circumstances, another method is used called the allowance method. Discuss the best reason(s) for using the allowance method and give some examples of companies that are likely to use that method. Also explain why it would ever be appropriate to use the direct write-off method, especially since it is not GAA
4. PROBLEM 3-6 In-Transit Items LO 8 On July 31, 2019, Ping Company purchased 90% of Santos Company's common stock for $2,010,000 cash. Immediately after the acquisition, the two companies' balance sheets were as follows: Ping $ 320,000 S 150,000 Santos Cash Accounts receivable 600,000 300,000 Note receivable 100,000 -0- Inventory 1,840,000 400,000 Advance to Santos Company Investment in Santos Company 2,010,000 60,000 -0- -0- Plant and equipment (net) 3,000,000 1,500,000 Land 90.000 90,000 Total $8,020,000 $2,440,000 $ 800,000 S 140,000 100,000 Accounts payable Notes payable Common stock 900,000 2,400,000 900,000 680,000 620,000 $8,020,000 $2,440,000 Other contributed capital 2,200,000 Retained earnings 1,720,000 Total Santos Company has not yet recorded the $60,000 cash advance from Ping Company. Ping Company's accounts receivable include $20,000 due from Santos Company Santos Company's $100,000 note payable is payable to Ping Company Neither company has recorded $7,000 of interest…
Advantages and disadvantages of accepting debit and credit card transactions as opposed to accepting personal Cheques from customers? (Consider both internal control and business reasons)
Which of the following transactions leaves a bank's total asset and liability unchanged? A bank receives deposits from a customer in the form of cash. O A bank writes off a bad loan it made to a local business. O A bank pays out cash to a customer who wants to withdraw money from his checking account. A bank makes a consumer loan with its cash reserves.
At the time companies write off accounts receivable, there is no effect on net income. true or false
Trade receivables include employee advances. occur when two companies trade or exchange notes receivables. can be accounts receivable or notes receivable. do not result from the operations of the business.
May you please help me determine which of the following statements are false?

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